IMB Versus Tata in American Market

 

Tata a multinational conglomerate based in Mumbai, India is competing with International Business Machines (IBM) Corporation based in Armonk, New York. Even though IBM is based in America, the evaluation of its sales revenues overseas was 65 percent. In the same situation, Tata collected 51 percent of it revenues from North America last quarter.  The raised question is that: “Who’s more American, IBM or Tata?” Investors have problem that cannot be solved without deep study because Tata stock declined 10% on April 21, but the IBM stock increased up to 25% since mid-February.

IBM’s competitive strategy is to diversify into emerging markets by its services business.  This helps the company to earn the half of its revenue from this strategy. In US, the company cut prices because customers are economizing, but emerging markets to help clients build out their technology infrastructure.  Tata consider US customers as important ones. Even though they are facing little bit a financial shortfall, but they focus on deferring payments by two big customers. “There’s no slackening of demand,” says N. Chandrasekaran, the company’s chief operating officer. “The pipeline is good. We just had some specific situations.”

Tata is taking American market because it recognizes the problems of customers. Americans are facing financial difficulties. It is why Tata improves its services to be designed in the way of helping customers.  Also customers consider the Tata business as more designed with simplicity and help them to save money.  The company sells more aggressively and its plan is not to hire more employees so that they cannot low its margin.

 

 By 20500203 - Entry: 7

Recession Threatened Starbucks!

There is more evidence of potential recession in Starbuck’s profitability. People have started feeling pinched that they are not paying $4.00 for lattes anymore. The company expects its first-quarter earnings per share to be 15 cent, when Wall Street analysts anticipate 21. Starbucks earned 19 cents a share in the same period last year.

Now their expectation for their full-year earnings per share to be little lower than that of the previous year which recorded 87 cents per share. As a result, it would be the first annual decline in profits of the company in eight years. Analysts anticipated a profit of 97 cents per share. The company said sales in stores open at least a year fell in the mid-single-digit range in the U.S., due to a decline in traffic. Restructuring costs also hurt earnings by 3 cents per share in the second quarter. Starbucks shares were down 11 percent in late Nasdaq trading. Shares closed at $17.85. The chain’s 52-week high for its share price is $32.30.

The company executives also stated that the current economic environment has been the weakest in their company’s history, marked by lower home values, and rising costs for energy, food and other products that are directly impacting their customers. Starbucks markets in California and Florida have especially had a hard hit due to steep housing declines.

The executives are trying to shake new life into Starbucks with a new, permanent everyday coffee, couponing, a bit more advertising than the chain is used to, retraining of baristas and new brewing standards. What is left for us? Just wait and see.

Entry 7. 20601002

eBay

Ebay is currently experiencing market saturation. The article explained how they came to this conclusion. They explained that Ebay saw only a 1% growth in new users compared to last quarter when the number of new users jumped up by 10%. In order to keep this company profitable, management decided that they must keep the active customers happy. Basically, their strategy was to keep their current customer base.

 

In order to implement this strategy, last month, Ebay decided to make some major policy and pricing changes. The first part of their plan was to abolish the negative feedback portion that sellers could put on buyers. This is a big change because until last month, Ebay sellers could give negative feedback to customers who would not pay in a timely fashion or other problems that they might create. This plan was put into effect to be friendlier to the buyers. Their basis for this change was that if the buyer was happier, then they would continue to shop on Ebay and the sellers would not be able to ignore the potential sales that they could get by using Ebay.

 

The second part of their plan was to decrease the listing fees for all merchandise and increase the final selling fees for those same products. This was done so that more products could be listed on Ebay and then that could attract more potential buyers to Ebay.

 

In all, this is a great business strategy on the part of Ebay. First, in the policy change, I believe that this change is good for Ebay. If the buyers are happier with the overall process of buying on Ebay, they will continue to come back. Sellers would then have to recognize that there are many potential customers available to them on Ebay and this would bring them coming back to Ebay as well. The second change, price change, is also a good idea. If the listing fee is lower, it would cost less to the sellers to list more items on Ebay. With more items listed, more buyers would be attracted to the site to look for the items they intend to purchase. Then Ebay would make up the difference in price cuts by receiving the final selling cost when the items are purchased.

 

In a saturated market, it is very important to keep customers happy. Many businesses in saturated markets focus a lot on customer service to keep their company on top. Ebay is implementing the same strategy here.

 

 Auditor